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Fraud is a serious problem for California car insurance policy holders. Like New York and Florida, it's one of the top states not just for fraud, but also for uninsured drivers at a rate well north of one out of every five drivers according to the New York Times and other sources.

The problem for those who decide to be legal and get car insurance quotes is that they do not realize that they can still be in trouble especially with fraud. There are sections of your California car insurance policy that deal with that 20 percent of the population.

Why It May Affect You

Motorists with California car insurance may be completely legal and aboveboard for them, but the unfortunate fact is that they may get into an accident with someone who is not covered. In normal cases, the insurance companies of both companies use police reports and inspections to apportion blame, and then use their own money to cover the costs of repairs, as well as the medical bills and potentially lost wages for anyone injured in a car accident.

When it comes to uninsured motorists, that changes. The insured motorist's policy may have separate rules regarding collisions where the second party doesn't have car insurance. Instead, your uninsured motorist section of the coverage will cover it up to the limits, generally $30,000 for one person, and $60,000 if more than one person is injured.

What if the Other Party Does Have Insurance, But Not Enough?

If you are not at fault in an accident, then the other party's insurance coverage pays for your medical bills, but only up to their limits. And that's a problem that many California car insurance policy holders may not realize they could have. As personal injury attorneys can attest, it can be difficult to get coverage if your medical bills are more expensive than what their limits are. For example, if you are the only person injured, and have $20,000 in medical bills, you would still be on the hook for $5,000 if their limits were only $15,000.

What to Look For in Your Car Insurance Policy Documents

Underinsured motorist coverage and uninsured motorist coverage are both listed on your car insurance policy documents, though they may be somewhat hidden. The basic rule of thumb is that you should probably have limits as high as you have for yourself. That means, if you have a $50,000 single-person limit and $100,000 per accident limit, you may want these limits for your underinsured or UIM coverage. This ensures that you're protected to the level you would have otherwise provided.

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